FTC delays enforcement of Red Flags Rule

The Federal Trade Commission has announced a 90-day delay in enforcing its controversial “Red Flags Rule.”

The first of its kind rule requires businesses that have consumer accounts – including many law offices – to implement written identity theft prevention policies.

Contrary to the arguments raised by some attorneys, the FTC has maintained that the rule, which was scheduled to go into effect on Aug. 1, applies to members of the bar.

According to a statement from American Bar Association President J. Thomas Wells Jr., the ABA and more than two dozen state and local bar associations called for the delay.

“This temporary reprieve is important to all in the legal profession,” wrote Wells. “However, the FTC’s continued assertion that it can, as it sees fit, regulate lawyers under the ‘red flags’ provisions is troubling, and unacceptable to the ABA.”

Wells said the ABA will continue to work with Congress to clarify that this rule should not apply to lawyers. If necessary, he said the ABA remains prepared to take the issue to court.